For most of what a managing agent does, its interests and the building's are aligned, and the building's lawyer serves both well enough. That alignment breaks in a specific and recognizable way: when the question stops being what the building should do and becomes whether the agent did something wrong.
Building counsel represents the cooperative corporation or the condominium's board of managers. That lawyer cannot advise you on whether the board's termination was proper, cannot negotiate your fees against the client, and cannot defend you against the board's allegations. Continuing to rely on them past that point is how agents end up making admissions to the lawyer who will be on the other side.
We represent management companies in disputes with the boards they serve. Call 212-233-1233 or email [email protected].
Where These Disputes Come From
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Fees
Unpaid invoices, disputed reimbursables, fees withheld after a termination, disagreements over what the base fee covers and what is billable as an additional service. The most common dispute and usually the most straightforward.
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Termination
A board ending the engagement without the notice the agreement required, or recharacterizing a non-renewal as a termination for cause in order to avoid paying. Terminations that are handled badly generate most of the litigation in this area.
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Authority and scope
A board second-guessing an expenditure, a vendor selection or an emergency decision, and claiming the agent exceeded its authority. These turn on the spending limits and emergency provisions in the management agreement, and on the board minutes.
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Accounting and funds
Demands for records, disputes over reconciliations, allegations of commingling or misapplied funds. Allegations touching on money are the most serious a managing agent can face and should never be handled informally.
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Blame for an outcome
A capital project that went badly, a violation that was not addressed, an insurance claim that was not filed in time, a vendor who was not supervised. Frequently the underlying decision was the board's, made against the agent's recommendation — which is why contemporaneous records of what you advised matter so much.
Which Side of It You Are On
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The board is suing you
Breach of contract, breach of fiduciary duty, negligence, failure to supervise, or claims relating to building funds. What you do in the first two weeks — preserving records, notifying your carrier, and reading the indemnification clause before you respond — matters more than the eventual defense. See defending a claim brought by the board.
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You are suing the board
Unpaid and withheld fees, expenses advanced on the building's behalf, wrongful termination, and enforcement of the indemnification the board agreed to provide. See bringing a claim against the board.
Resolving It Without Litigating
Most of these disputes should not be tried, and the parties usually know it. The building does not want its management history examined in public, and the agent does not want a lawsuit with a board it may encounter again in a small industry.
- A negotiated exit that settles the fees and ends the engagement on agreed terms, with mutual releases
- A clarification of authority and reporting going forward, where the relationship is worth keeping
- An agreed accounting by a neutral, where the dispute is genuinely about numbers
- Mediation, particularly where the board is divided and needs cover to settle
- Arbitration, if your management agreement requires it — check before you file anywhere
What rarely works is letting it drift. Unpaid fees age, memories harden, and a board that has spent six months telling itself a story about why it did not pay you becomes much harder to settle with.
Speak With Our Firm
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Your own counsel, before it escalates
The most useful time to call is when the relationship has gone wrong but nothing has been filed — a termination letter has arrived, an invoice has gone unpaid for three months, or a board member has started asking pointed questions about an expenditure. That is when the options are widest and the cost is lowest.
Call 212-233-1233 or email [email protected].
